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tv   Bloomberg Best 2016 EMEA Year in Review  Bloomberg  December 31, 2016 9:00am-10:01am EST

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>> coming up on "bloomberg best" the stories that shaped the year in business in europe, the middle east, and africa. the brexit referendum took center stage. >> markets are pricing in we are staying in. >> prospects for u.k. outside the e.u. are incredibly bright. >> people understand that the decision with seismic consequences. francine: and the still uncertain aftermath. >> how can you regret taking back control of your own life?
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>> the economic consequences of brexit will be more severe. >> government is a pro business government. francine: the financial sector suffered considerable pain. >> the sentiment is bad, evaluation is bad and the results are really bad. >> there needs to be a cultural change. it is unacceptable. francine: why europe's central bank tried to ease the region into growth. >> this has changed from an external affects game to a truly domestic demand lending game. francine: it was a year of turmoil in turkey and up and down for oil and controversy and regulation and transformation for saudi arabia. >> we are talking about the biggest economic shakeup since the kingdom was founded in 1932. francine: join us for a look back at 2016 on bloomberg best. ♪ francine: welcome to this special edition of "bloomberg best." we will review the most important business review and analysis in
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europe, phaoefrplmiddle east and africa we brought to you in 2016. we start with one of the biggest stories this year, brexit. as soon as britain announced it would hold the june 23 referendum on european union membership, markets reacted and a fierce debate began. alix: the prime minister answering questions from lawmakers in the house of commons. he's been making a case for take -- staying in the european union. >> is the brexit risk exaggerated? >> it seems to be a serious risk. it is not a central case but we can argue for many months investors need to take notice. >> obviously this has really enhanced uncertainty, and it will have a big impact on the market and mark carney said they are going to make plans. >> the chancellor outlined the budget for great britain devised
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-- great britain, he revised down growth and warned of economic risk of leaving the european union. >> it had a whiff of preelection budget because it is a prereferendum budget. mark: the central bank voted unanimously to keep rates unchanged and highlighted uncertainty around the so-called brexit. >> this is the first time that the bank as a whole has expressed an opinion about how it will affect the economy. >> markets are pricing in that we are staying in currency markets certainly. there could be extreme volatility if we vote to come out. >> i believe we have a big turnout and people understand the decision with seismic consequences particularly economic consequences and i can't believe that people will shuffle this one off. although, i do think there's a large number of british people who are still struggling to come to terms with what it is all
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about and find the claims and counterclaims confusing. mark: is the lead campaign lying to the british public of the risks staying in the e.u.? >> my view is the prospects for the u.k. outside the u.k. are incredibly bright. the risks of staying in our are incredibly serious. >> we have had four budgets the last year and everyone of them the forecasts have been wrong. why on earth would there be a recession? francine: investors pull out money. this is what the government -- i'm not making this up. this is what the government has pointed to. this is what mark carney is pointing to. >> a nice impartial man. francine: do you think dave cameron regrets calling the referendum ? >> i think some close to him regret it. i think he this it is something you have to deal with and i have some sympathy with that. >> they are set to leave the e.u. following a vote on the membership june 23 next week.
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which number shouldn't we believe and which numbers shouldn't we? >> it seems pretty clear the numbers have moved toward leaving. we are now looking in the internet polls around 48.5 to remain and 51.5 for leave. so not a large movement but clearly there. francine: the u.k. is still digesting the news of the labor m.p. jo cox. both sides of the brexit debate have suspeed a second day.much e campaign will resume? >> at the moment we don't know. both campaigns have taken to the sidelines today. the imf has delayed the report on brexit until tonight. a couple of polls due today are pushed into tomorrow. francine: the pound surges and campaigning resumes as we enter the final days ahead of the referendum. >> the bookies and forecasters have been more confident the remain will be the case than the polls but the last 48 hours the remain camp does seem to have turned back a bit of momentum against them last week.
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francine: on june 23 the u.k. voted to leave the european union and shocked some and thrilled others and rattled currency and financial markets. here is a look at how bloomberg television covered this landmark event in global business. >> we are waking up to a whole new reality. it is brexit. >> these guys have been trading since 8:00 p.m. last night and they started to see ticks down in cable and futures and ticks down in u.s. futures. it accelerated at 2:00 a.m. after it started coming out that the leave camp was getting more than the remain. >> financials will be absolutely front and center this morning. >> david cameron is making an announcement he will not depart straight away but the next three
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months. i'm trying to work out which is the more significant events, the fact that article 50 will not be traded instantly but three months before the next prime minister does it. francine: stocks are plunging and the pound at a 45 year low and break away from the 50 and a little bit of retrace having to do with the safety blanket of the central bank and it is a brutal move for banks and home builders. i want to show you banks because we are seeing losses we have not seen since the financial crisis. it has been at least since 2008. they were trying to deleverage a lot of it but most investors were wrong going into this. guessing and betting and investing in the fact that the remain camp would win. they have had to completely
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unravel those. we are talking about margin calls and stop orders setting off and everything was limit down this morning. >> one man is steering the ship of the markets, it is mark carney. 2008 to 2013 he ran the central bank of canada. many say he was responsible for canada avoiding many disruptions others had. the phrase he used the bank of glanwill not hitate to take action, a quarter of a trillion pounds is available. francine: this is pounds. you can see how it was crushing the financial crisis. i know banks are not systemic and there is a safety blanket from central banks, but you can see the movement and panic of traders analyzing the results at 3:30 a.m. this is chaos. does it feel as bad as 2008? >> it is difficult to understand why a lot of smart money was betting on remain when the result is substantially in favor of brexit. i'm not surprised by the hectic market this morning.
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francine: we know european leaders are in crisis mode after this vote and they are locking themselves in emergency meetings probably across the region. will this lead to a more fractured europe? >> the exit is the worst possible scenario. i believe honestly much worse for the u.k. than for the european union. >> is this the beginning of the end of the e.u.? >> there's no doubt, i have been warning about this many years now that the european union is in a state of disintegration. >> it is a monumental event in u.k. history breaking 40 years of integration into the e.u. project. >> this will not change fundamentally the special relationship between the united states and britain. >> it is a terrible outcome in all respects.
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it did not have to happen. francine: that was just the initial moment of europe's new reality. later in the program, we will look at how the brexit story has played out since both economically and politically. in the year when uncertainty was the dominant theme we will retrace the roller coaster fortunes of oil market and look at volatility and instability in turkey. but coming up next, 2016 battered many european banks. our review continues. this is bloomberg. ♪
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francine: officials confirmed having agreed to create a fund to support the banks and it is hoped to tackle 360 billion euro
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in bad debt italian banks are carrying. >> it is going to address the two fundamental issues hitting the italian banking system right now. the need by some banks to raise capital and to try to reduce the level of nonperforming notes. alix: italy said to consider capital injection. italy wants to save the banks and the e.u. has ruled you may not be able to do that. >> jpmorgan said the italian banking issues are political and not financial. >> they would have removed most of the bad debt -- investors are not certain that will be sufficient to maintain a viable
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business model. francine: the struggles of italian banks were one aspect of a difficult year for the european financial industry. there were some bright spots, but overall, much more pain than gain. let's look back at some of the most challenging moments for some of europe's biggest banks. >> shares slumped yesterday after it became the biggest lender in four years to reassure investors that it has enough cash to pay debts. francine: it was triggered by a note that questioned deutschebank's ability to pay cocoa bonds. it is a type of debt that if things go badly that they convert into shares. >> it is more about cash than financial difficulty. it was a matter of did they have the cash flow to pay them and that is why they got the note to calm investors because i was getting calls saying are they going to need more capital. >> credit suisse has announced
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it is targeting cost savings of 1.7 billion swiss francs cutting an additional 2000 jobs. credit suisse is one of a number struggling to boost profits. >> were you surprised by your illiquid positions? >> yes. >> when did you find out? >> january. >> why was it not clear before? >> it was not clear to me or my c.f.o. who said it on the reco and many in the bank. that is where i said it. there needs to be a cultural change. francine: what will it take for investors to rerate european banking stocks? >> i think a view that we now have predictability in how the regulators will deal with banks going forward. that is probably the most important thing. we need to believe we are at least at the beginning of the end of the regulatory environment for european banks going forward. francine: deutschebank says second quarter profit was almost wiped out and deutschebank set aside money to cut jobs.
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>> sentiment is bad and evaluation is bad and results are bad, so we were expecting some pain because there is a restructuring and turnaround and it is painful but the rewards in terms capital and balance sheet strength are not there. >> deutsche bank says they will not pay to settle an investigation into the firm's sale of mortgage backed securities. that is more than triple what some analysts estimated could be a potential worst case. the 14 billion they have been asked we are not going to be certain of an outcome until we are there. credit suisse has followed suit this morning from agreeing to pay $5.3 billion to result its that's resolved its mortgage backed securities pro.
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>> given where we have been, i think this is a bit of relief. francine: the european central bank also went through an eventful year as the economies were slugish despite a program launched in 2015. in 2016 the e.c.b. continued to attempt to get growth going. jonathan: the e.c.b. has cut of its interest rates q.e. boosted to 80 billion euros a month. they have increased the assets available to buy to include no nonbank corporate debt. -- to buy nonbank corporate debt. >> the way i read it is the following. in the last few months or year it has been an epic scheme. extending the balance sheet to weaken the currency. this is changing out in two respects.
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number one, they are buying nonfinancial corporate. so they are going straight out to help that sector and really importantly they are now making money and even maybe negative rates for banks it borrow. it is changed from an external fx game to a domestic demand lending game. david: the european central bank has plunged into the corporate bond market. some of the initial purchases buried -- varied from several european utility companies to ab inbev. jon: the ecb leaves all three main interest rates unchanged and and asset purchase program unchanged. >> they say they are ready, willing and able to act in the aftermath of the brexit vote. what signal would it send to markets if mario draghi had announced changes? >> i think if he had announced something more meaningful that would have suggested that the impact
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of the u.k. decision to leave e.u. was already being felt in the european economy. jonathan: the rate decision comes down in line with expectations the refinancing rate is zero and deposit rate negative 40 basis points and marginal facility is unchanged at 0.25%. the ecb says q.e. will run through march of 2017 or beyond. what do you make of that? >> may be the fact there is little volatility in the market is allowing him breathing space. he wants to keep his powder dry. jonathan: as we await this ecb rate decision, the major estimate is for rates to remain unchanged and they come through unchanged 0 with a deposit rate negative 40 and margin lending facility stayed at 0.25%. no big surprise. what they didn't discuss is extension of q.e. beyond march. they didn't discuss that horizon at all. they did not discuss tapering of quantitative easing, leaving the market wondering what they did discuss in the meeting.
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>> despite headline inflation picking up because of the contribution from energy prices, there is no convincing evidence that underlying inflation is on an upswing. that is the bottom line. go back to the mission. my main take away is nothing at this stage. we will wait for the forecast and projections. december is where we are going to discuss. francine: coming up on our 2016 year in review, turkey has been a financial and political hot spot. we will revisit a volatile year and visit with the president. this is bloomberg. ♪
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francine: once again, europe wakes up to the threat of
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terrorism and once again in belgium and we have to try to understand the scope of what we understand are coordinated attacks and how big this network is. >> this is really the first large scale terrorist attack the largest in this country since the second world war. >> our top story, terror returns. france extended a state of emergency and members of the security forces after bastille day attack in nice killed at least 80 people. >> france has all those conditions to remain the center european terrorism, the european terrorist threat. it is going to get to a critical maximum. with people who are vulnerable to radicalization to attack france now and i think that is the conditions for that are not likely to change.
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francine: somber memories with violence in brussels and nice underscoring instability. one nation that faced many crises of instability in 2016 was turkey. political upheaval came to a head in july with an attempted coup against the erdogan government, sending currencies and credit markets reeling. here is a look back at turkey's turbulent year. turkey's prime minister is expected tstep down this month after losing a power struggle with president recep tayyip erdogan. the tussle at the top has seen nt the stock market into a tumble. how worrying should it be? >> the contract erdogan made with investors is unraveling a little. he promised them stable economic management, and they have been relatively happy with the policy makers. in return, investors have turned a blind eye to some of his geopolitical adventures in that part of the world and we are seeing part of that contract
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coming undone. >> we have breaking news out of turkey, reports of shots fired and helicopters flying overhead. the prime minister saying that was because of an uprising in the army ranks that was being quelled. the prime minister saying it has been thwarted or is in the process of being thwarted but it is not a coup. >> many say it is erdogan's chance to galvanize power more so in a presidential system. >> that is what erdogan has wanted and he changes the parliament from a parliamentary system to a presidential system where he is the dominant person. he holds the lever of hours in -- power in his hand. >> given the level of uncertainty. >> more repercussions in turkey following the failed coup. s&p has downgraded its rating on
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the country to double b from double b plus. >> president erdogan taking further action overnight, declaring a three-month state of emergency. what is it like to invest in places with the rule of law? doesn't that apply to turkey? >> it applies to the extent the government wants to apply it at this point. francine: let's move to turkey's central bank which is moving to add more stimulus to its economy. it cut the overnight lending rate for a six months by 25 basis points to 8.5%. >> many expect them to keep cutting rates as long as the global environment permits. >> earlier today, the central bank cut interest rates. are you happier with the current rate of interest rate? best level -- with the current level of interest rates? >> i see it as a steady careful rate and balanced cuts. because it is not right to make
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sudden moves up or down that could contain some violence that could create a tremor in the economy. but i believe it to be beneficial to continue this steadily. and right now, this new administration of the central bank since they took office, they have been carrying out the cuts, taking the concentration the interest rate policies of the government. and i think this is an important signal especially for investors. francine: still to come our "bloomberg best year in review" we go to the middle east. guy johnson will follow the drama of opec and markets and saudi arabia's vision 2030 overhaul. the grand plan to move the kingdom away from its dependence
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on oil. and much more on the repercussions of brexit and bloomberg's exclusive interview with vladimir putin. >> despite the criticism of our western partners, we are developing a process. francine: this is bloomberg. ♪ .. ..
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♪ guy: welcome back to this special edition of "bloomberg best: a review of 2016 in europe, middle east and africa"" i am guy johnson. let's focus now on the middle east. the year began with optimism that the oil market would rebalance by the middle of 2016, but early on, producers found themselves facing a supply glut and a price plunge. >> more than $100 billion wiped off the 61-company bloomberg world oil and gas index as it hits the lowest level in more
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than a decade. wti crude now at a 12-year low. >> investors close to throwing in the towel? i see hedge funds have cut their bullish bet to the lowest since 2010. i mean, are we close to that point or not? >> we are starting to see the conditions for a bottom. but we are not there yet. >> what kind of oil price do you need to break even? >> we at 60 can balance the books effectively. >> if you had to put your money on a number -- >> which hopefully we don't. >> the price at the end of the year would be what? >> 48. you can come back and kill me because i'm sure i will be wrong. francine: the energy ministers of saudi arabia and russia agreed to freeze oil production in a meeting. what does it mean? the markets were disappointed. >> the market wanted something that was probably too much to ask for the first meeting of these two countries publicly in a month. >> the meeting of top oil producers ended with failed agreement. no deal. we are seeing crude and brent tumbling this morning. >> what happened in doha and are
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we ever going to have an agreement between the two countries? who is going to give in first? >> cartels as you know, francine, require a degree of trust, and there are many things between saudi arabia and iran, but trust probably would not figure on the list. >> brent crude about $50 a barrel, dropping u.s. stockpile spurring the latest with the domestic drops. >> the catalyst so far seems to be the stockpile data we got from the u.s. showing a much higher than expected cut in stockpiles , something like 4 million barrels. however you have to wonder how much further that rally can go ahead of the opec meeting next week. seems at least from the gulf side we are seeing a continuation of the strategy of maintaining market share. >> wti brent falling today and opec oil ministers failing to agree to an output limit. >> the one thing that the opec ministers did agree on is the new secretary general. that is a positive.
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you know, they have been bickering about that for four years and decided that is mohammad barkindo, the nigerian front-runner. francine: cutting the estimate of oil oversupply seeing the markets balance in 2017 and cut the estimate of oil oversupply. >> our projection, our plan is still conservative. we talking 40 this year and 50 next year. david: oil is on a trend up. it is a bull market now after it had been a bear market just three weeks ago. >> we have had this complete turnaround. what has happened? lots of people including the saudis are talking about a production freeze. >> saudi arabia and russia have agreed to work together to ensure oil market stability for the leaders of the two biggest crude producers stopped short of offering detailed proposals. >> they need to cooperate to have stability in the market. the russian president made it clear that iran should be exempt from agreement before this level of output. >> opec has agreed to cut production for the first time in eight years. >> it is opec bringing prices out.
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it is a surprise and a basic change. >> the world energy getting underway today. vladimir put is expecting freezing or even cutting operations with opec. >> the brazilian opec supply has been a real headache. they had to bring russia to the table. that would take at 232.5 million barrels per day, that was the original agreement. >> who are the winners? >> all this is benefiting from much higher prices.
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the independent producers, the show producers are some of the biggest winners. guy: against this backdrop of crude's uncertain future, the kingdom of saudi arabia began a sweeping transformation of its economy with programs and reforms called vision 2030. the ultimate goal, to reduce dependence on oil and stimulate domestic and foreign investment in order to diversify revenue. the first hints of the plan began to surface in late january. >> saudi arabia is considering an ipo of the world's largest oil business, saudi aramco. they have ruled out selling reserves. >> they have two options. one option is selling off a stake in the downstream operation. that is code in the oil industry for refining. the other would be selling a stake in the parent company. both those options still on the table. >> saudi arabia has big plans to deal with the declining price of oil. create a $2 trillion mega fund.
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in an exclusive sitdown with the crown prince, we got the details on how saudi arabia wants to evolve its economy. >> he has this obsession about moving the saudi economy away from oil and basing it around something new. and this $2 trillion fund into which aramco will go is an amazing thing. it is enough to buy google, microsoft, the alphabet, lot of them. warren buffet. and they would still have change to spare. >> what is the latest on the ipo? >> the way that this seems to be going forward, there's been a lot of skepticism about whether the saudis are for real about this. they are bringing in jpmorgan, what seems to be the lead banker on this and underwriter and michael klein, a longtime energy and indury banker, investment banker at citigroup for a long time.
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this is a strong team and more evidence that the saudis are serious about doing this. probably before the end of 2017. mark: all eyes on saudi arabia today, officials unveiling a blueprint diversifying the country's economy. >> essentially we are talking about the biggest economic shake-up since the kingdom was founded in 1932. ey will list the count's oil compan they will take that moy, and they will drive sovereign wealth funds which they will use to diversify away from oil. they will roll back subsidies. they will increase taxes. francine: saudi arabia has approved a plan to cut public sector wages as well as subsidies by 2020. as part of its post-oil future, the strategy aims to curb public debt which the kingdom sees surging to 30% of gdp from less than 8% now. >> the nuts and bolts two numbers, 7.7 and 30% and debt load and 45% of the nation employed by the government to
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40% employed by the nation. cutting subsidies and boosting the non-oil revenue. that is the key, francine, to this deal. >> saudi arabia will hold investor meetings in london, los angeles, boston, and new york today as it prepares its first foray into the international bond market. >> saudi arabia is the largest economy in the middle east planning to come to market with what we are told will be an issue between $10 billion to $15 billion. that would make it the largest bond issue from the middle east ever after qatar's $9 billion last year. mark: saudi arabia is going on a sales spree to raise $17.5 million as it tries to shore up its battered finances after the slide according to people with knowledge of the offering. saudi arabia already receiving bids for as much as $67 billion beating argentina's $60.5 billion in april. >> you have got to remember this
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bond issuance is very much like an ipo of saudi aramco because the economy itself is based on oil. this is the first step, and it is a very aggressive step into diversifying outside of the oil space, and the bonds themselves are really just sort sort of a feint for saudi aramco that they will go to in order to increase their capitalization or recapitalization of their oil asset. guy: up next on "bloomberg best: year in review," the thorny business of regulating e.u. competition and the complex task of steering the u.k. towards an actual brexit. >> identification of both the goal and the timeline would be helpful. guy: this is bloomberg. ♪
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♪ >> the european union took another shot at a u.s. tech giant, this time it is google. over the android software saying google's restricted contract with makers of tablets and phones. >> we are seeing a very active european commission looking at google. they could order google to change things. they can and have ordered microsoft and intel a huge amount of fines, and we have seen billions. >> truck makers agree it pay eu regulators a record $3.2 billion fine for fixing prices over 14 years. >> yes, it is a very, very big fine, but we are talking about a very damaging cartel. mark: the european competition commissioner margaret has ordered apple to pay a record tax bill. how is ireland responding and how is apple responding? >> there is a massive shock here today around this figure. >> they are repealing it because we don't accept that the irish authorities did anything improper or illegal.
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>> ireland has 140,000 employed by u.s. larger tech companies. the risk is those jobs start to be put at risk, and it ceases to be the automatic place where american companies go if they are going to europe. >> an unusual moment u.s. saying it doesn't want to collect and ireland doesn't want to collect and e.u. saying you better do it. >> in europe you are more than welcome to be successful to grow to be big, and we will applaud you all the way. but the thing is if you start to misuse your dominant position to prevent others from having the same success, then we get concerned. guy: 2016 has been busy year for margaret and the e.u. competition commission, and with political populist movements reshaping trade, the commission stands to play a significant role again in 2017.
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now back to brexit. after the sudden shock of the referendum, investors and policy makers found themselves in uncharted territory. here is a look back at some of the market action and ensuing reaction from the second half of the year. jonathan: june 27, 1985, that is how long you have to go back to find sterling trading of these kind of levels, a fresh 31-year low on the cable rate at 129.80. >> formal u.k. property ones frozen and investors seek to dump real estate holdings in the wake of the brexit vote. three have suspended trading in at least 5.7 billion pounds. >> the level of panic is clearly spreading. you have more than half of the real estate fund in the u.k.by value frozen in the space of four days. it is incredible. >> how much will commercial property assets drop? can it touch the 2007, 2008 level?
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>> i don't think so. we are in a very different environment. >> britain's prime minister is pulling up to 10 downing street, her future home. she is 59 years old, she is this country's second woman to be in the job. margaret thatcher was the first. the former foreign secretary has just been appointed chancellor of the exchequer. he will be the finance minister, and he's been in the parliament in the u.k. for the last good 20 years. francine: i'm guessing florence johnson is back. how did that happen? >> you know, just a few days ago, if you asked what boris johnson will do now, i think everybody outside of 10 downing street would have been scratching their heads, yet he is now the foreign secretary. >> the new brexit czar david davis. >> i will say one lasting thing about davis.
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-- of ditching brussels was they wanted to think britain could survive very well as a freethinking, independent nation. >> what is the path you can take to assist prime minister may to move the united kingdom forward in their negotiations with brussels and europe? >> clarity of intent. rapidity of execution. identification of both the goal in the timeline would be very helpful. jonathan: the bank of england has cut rates to 0.25 and expanded q.e. by 60 billion pounds. they intend to buy corporate bonds. mark: why would they overdeliver, because it certainly brought out the sledgehammer. i> i the ecic outlook has deteriorated and a central case is that this could be a mild recession type of environment, so it makes sense to act as quickly as possible, and as they have done today, to overdeliver. jonathan: import cost jumping and that is the story in the data this morning. >> unsurprising in so many ways. that number up 3.4% and no
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surprise given what we have seen post the brexit and pound plummeting. >> so far this week, we have seen data on consumer prices and jobs, and today we got retail sales which surged 1.4% in july as british consumers seem to shrug off any brexit anxiety. >> there was the expectation it would be a poor week, it was thought generally that brexit was going to be bad. and now we see the pound going up in response. >> the u.k. pmi released, we have got a blockbuster number. we have gone from 47.4 from 52.9. >> i just don't know whether i have learned anything at all. that tells me the effect of the referendum will come through as a result of long period of uncertainty while we try to hash out a deal, and we should not expect anything that happens in the first three or four months to tell us anything about anything. >> you managed to push brexit through. any regrets? >> no, none. how can you regret taking back
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control of your own life? francine: we are hearing that it could take five, six years, 10 years to leave the e.u. that is a lot of uncertainty for the markets. >> there is no reason why it should do that. >> can you see a reason to vote against the triggering of article 50 if you thought the parliament didn't know enough what you are stepping into? >> we would reserve our position and the right to oppose, not that we don't respect the result of the referendum. obviously we do. but i want to set out those lines that we maintain crucial market access. >> my raw view is we should be ending up with, to use the jargon, a softer brexit than a harder brexit and economic consequences of a harder brexit will be more severe. >> the pound has fallen to a 31-year low as they brace for a hard brexit. we trade this morning around the 127 level. how much lower could we go? >> it will be a bumpy ride. i think you are right. investors are looking at this hard brexit scenario, and they are getting spooked. >> they listened to may's speech, and they heard this
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voice which sounded much more critical of business than pretty much anything we have heard a long time. is this a government that is antibusiness >> absolutely not. it is a pro business government, strongly supportive of open markets, free markets, open economies, free trade. but we have a problem of -- and not just british problem -- it is a developed world problem of in keeping out populations engaged and supportive of our market capitalism economic model. mark: we await the u.k. gdp numbers. francine: breaking news, last six minutes, so the u.k.must hold for starting the two-year countdown to brexit, so ruled a panel of judges setting up a constitutional confrontation at the country's supreme court. this is significant, but we could end up with a situation where it is a harder brexit. >> could lead to a harder
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brexit, parliament could be saddled with this, and then teresa may could push it to parpliament. the kind of parliament will own the vote to some extent. francine: what does that mean? mayhem for the markets? >> it adds some more uncertainty to the mix. >> the chancellor of the exchequer has been on his feet. quite a short autumn statement in many ways. the big headline number out of this is they have downgraded expectations for growth next year. this didn't feel like the big kind of stimulatory subject many predicted they would need post brexit. >> we are not talking about a economy in recession. the strength of the u.k.economy much better than many economists predicted would be the case after the brexit vote, but remember of course that was just the brexit vote and not the brexit. we are still looking forward, looking ahead to march of next year which is when we are expected to see article 50 triggered. ♪
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numeral protests at the supreme court. a new law before officially starting the exit from the european union. government in the lower urt wants to avoid that as it starts the process in march. >> what are the chances of the supreme court overturning what we heard from the high court? >> i think the chances are slim. ♪ ♪
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>> a new report says world leaders, criminals, and celebrities used shell companies to hide their wealth. according to a group of investigative journalist, at least $2 billion in transactions involved people and companies linked to vladimir putin. they say their information comes from files in a law firm in
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panama. [speaking simultaneously] >> what this is about is 11.5 million from the fourth largest offshore law firm. >> i never read anything related to mr. putin directly. mr. putin was never involved. sorry to say. >> in english. [laughter] guy: in europe, the middle east, and africa, 2016 was a year in which the unexpected seemed to happen as a matter of routine. so let's wrap up our review of the year with a conversation with one of the world's most unpredictable political figures. in september, bloomberg editor-in-chief john micklethwait sat down for an exclusive interview with the russian president vladimir putin. john: have you yet decided if you will run in the presidential elections of 2018?
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vladimir putin: we are now on the brink of parliamentary election. we need to hold the election to see the result. but after this it will be another in almost two years, so it is too early to speak about this. in the modern rapidly changing world, it is damaging to talk about this. we need to work to make sure the plans and tasks we set ourselves are completed. we need to raise the quality of people's lives, develop the economy, sociability and increase the country's defensive capabilities. depending on the solutions to these tasks, then we can see how to organize the presidential election campaign in 2018 and who should take part. i haven't yet made a decision for myself.
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john: do you think russia is getting easier to run or harder? vladimir putin: it depends on when. with ivan the terrible, nicholas ii, khrushchev? john: in your time, has it gotten more difficult? vladimir putin: i think it is more complicated because despite all the criticism of our western partners, we are developing processes of domestic democracy. these elections will be significant and improve this year. there is a practical dimension. we now see the linking leadership accord, the united russia party, and the people are asking, what problem? what is going on, what happened? clearly it is a proactive election campaign, and they are are taking part in the elected process.
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they are all in the media and newspapers. what do they have to offer? they all criticize authority. they meanwhile don't say how to make things better. and they even say such things as those shallow views are fairly realistic and sometimes totally unfeasible. then they look great on the television. they criticize and pour scorn on the ruling party, but i don't think they are ready to take responsibility for taking some necessary but ultimately unpopular decisions. ♪ guy: that concludes our special edition of "bloomberg best: a review of 2016 in europe, middle east and africa." you can find more stories and analysis and interviews in 2016 on bloomberg.com and all the latest business news 24 hours a day.
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thanks for watching. i'm guy johnson. this is bloomberg.
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♪ tom: there is no question america and the world changed in 2016. the new year brings president trump and radical change to washington. nothing will change for janet yellen. the chair, they are accommodative, and the fed must right size amid trump reflation and go to cash. ok, here is the truth, folks. i went to cash, and i and many others have seller's remorse. for this entire hour, abby joseph cohen from goldman sachs, we look at 2017 through the prism and synthesis of economics, finance, investment, and international relations. really with the perspective of decades that abby joseph cohen has brought to all of

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